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Bitcoin mining becomes more profitable after difficulty crash

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Key facts:
  • Bitcoin’s price rose above $60 for the first time in weeks.

  • The 2018 bear market also forced a decline in hashrate and mining difficulty.

Bitcoin mining profitability received a slight boost as Bitcoin mining difficulty dropped from 36.95T to 34.24T at the last adjustment on Dec. 6.

Hashrate is an index that allows us to measure the potential profits achievable based on the processing power a miner contributes to a network. In the case of Bitcoin, this indicator has fluctuated between 55 USD/PH/day and 60 USD/PH/day since mid-November, according to the website Hashrate Index.

The recent decline in the difficulty of Mining of Bitcoin allowed the hashprice (value assigned to a unit of calculation) to rise to 63.87 USD/PH/day. This fact can be viewed from two perspectives. On the one hand, miners receive a little more for the hashrate they contribute to the network, due to increased profitability. On the other hand, for the difficulty to decrease, the average hashrate must decrease. hashrate The overall hashrate of the network, i.e., the mining power of Bitcoin, has also shrunk.

The graph compares the mining difficulty and estimated hashrate in the bitcoin network between November 8 and December 6, 2022.
The graph of bitcoin hashrate (bottom) shows a drop below 200 EH/s at the end of November, which may have influenced the drop in mining difficulty. Source: statoshi.info

CryptoNews recently reported that Bitcoin miners had shown. signs of a pullbackafter struggling for several months against the current bear market. As the price of bitcoin fell, miners added more power to the network. However, it seems to have gotten to the point where some miners were resigned to shutting down some of their machines or reducing the intensity with which they operate.

In 2018, there was a prolonged downward trend in the cryptocurrency market that resembles the current one. At the time, Bitcoin had reached an all-time high price thanks to a meteoric rise in late 2017. When the bubble burst and the price began to fall, miners also tried to hold on for a while. However, between October and December of that year, the hashrate and difficulty of mining Bitcoin decreased by 30 percent.

A lire aussi :   BCE : Fabio Panetta contre Bitcoin et Crypto

The FTX case is another of the events that have affected Bitcoin mining causing a drop in hashrate. First, there is its impact on the market, the fall of which increases the risk of a downward spiral for miners. In addition, FTX dragged a number of companies, including BlockFi, into bankruptcy. The company had financing agreements with several mining companies to purchase hardware that was now being used in the mining industry. have been discontinued.

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